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DECISION

On the issuance and use of Government bonds in the 2003-2010 period

THE PRIME MINISTER

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the National Assembly Standing Committee's Resolution No. 414/2003/NQ-UBTVQH11 of August 29, 2003, on the issuance of government bonds for the construction of a number of important traffic and irrigation works of the country;

Pursuant to the National Assembly Standing Committee's Document No. 507/UBTVQH11 of May 25, 2006, on the plan on distribution and use of the government bond capital source in the 2003-2010 period;

Pursuant to the Government's Decree No. 141/2003/ND-CP of January 20, 2003, on the issuance of government bonds, government-underwritten bonds and local administration bonds;

At the proposal of the Minister of Planning and Investment in Document No. 4649/BKH-TH of June 23, 2006, on the use of the government bond capital source in the 2003-2010 period,

DECIDES:

Article 1.- To issue government bonds aiming to mobilize investment capital in Vietnam dong and foreign currencies for investment in some important national works defined in the List of works funded with government bond capital in the 2003-2010 period (see the Appendix enclosed herewith).

Article 2.-

1. The total value of government bonds issued in the 2003-2010 period is VND 110,000 billion.

2. The annual issuance volume and issuance time shall be determined on the basis of capital demands and execution progress of projects.

3. Total capital amounts mobilized from the issuance of government bonds shall be channeled to the State Treasury and disbursed according to project execution progress.

4. Foreign currency amounts obtained through the issuance of foreign-currency bonds, after deducting direct expenses in foreign currencies, shall be sold to the State Bank of Vietnam in order to increase the State's foreign exchange reserves; Vietnam dong amounts paid by the State Bank of Vietnam for purchase of these foreign currency amounts shall be transferred to the State Treasury.

Article 3.- Order of priority in allocation of capital to projects funded with government bond capital shall be as follows:

It is necessary to prioritize the allocation of capital to projects under the Prime Minister's Decision No. 182/2003/QD-TTg of September 5, 2003, Decision No. 286/QD-TTg of March 23, 2004, and Decision No. 252/QD-TTg of March 8, 2004, and the XIth National Assembly's Resolution No. 33/2004/QH11.

Article 4.- Principles on allocation of government bond capital

1. To ensure that the to be-allocated capital amounts shall not exceed the total levels to be assigned to each branch or domain as announced.

2. To concentrate investment capital for projects in the priority order, ensuring adequate capital for the definite completion of projects and to meet urgent demands of projects.

Article 5.- Responsibilities of ministries, branches and provincial/municipal People's Committees

1. The Ministry of Planning and Investment:

a/ To notify each ministry or locality of the plan on allocation of government bond capital, clearly stating the total government bond capital and the government bond capital for each domain or branch managed by ministries, provinces or centrally-run cities, and of the list of projects funded with government bond capital source (without indicating the specific capital level for each project) as defined in the Appendix to Document No. 4649/BKH-TH;

b/ To assume the prime responsibility for, and coordinate with the Ministry of Finance in, scrutinizing and summing up the annual demands for government bond capital of the listed projects to serve as a basis for the mobilization of government bond capital in the year, which shall be submitted to the Prime Minister for consideration and decision;

c/ To send to the Prime Minister quarterly, annual and irregular reports on the situation of investment made with government bond capital;

d/ To assume the prime responsibility for, and coordinate with the Ministry of Finance and concerned agencies in, supervising the allocation of capital by ministries and localities, ensuring that capital shall be allocated to proper subjects for proper purposes on the principles of capital allocation; and to propose the Prime Minister to settle problems arising in the course of implementation beyond its competence.

2. The Ministry of Finance:

a/ To organize the issuance of government bonds according to plan and execution progress of projects funded with government bond capital;

b/ To make accounting and finalization of capital sources mobilized from the issuance of government bonds and supervise the use thereof; to organize the management, allocation, payment and finalization of investment capital for projects in accordance with regulations;

c/ Quarterly, to report to the Prime Minister on the mobilization, allocation and settlement of investment capital for works;

d/ To coordinate with the Ministry of Planning and Investment and concerned agencies in proposing the Prime Minister to solve problems arising in the course of implementation.

3. The State Bank of Vietnam:

a/ To coordinate with the Ministry of Finance in organizing the bidding of government bonds via the banking system;

b/ To re-purchase foreign-currency amounts obtained through the issuance of foreign-currency bonds to increase the State's foreign exchange reserves and to sell foreign currencies to the Ministry of Finance for repayment of principals and interests of foreign-currency bonds upon their maturity.

4. The Ministries of Transport; Agriculture and Rural Development; and Defense, and provincial/municipal People's Committees:

a/ After receiving notices on assignment of government bond capital plans, to allocate such capital to each work or project according to the order and principles stated in Articles 3 and 4 of this Decision.

- To allocate capital only to projects for which investment procedures have been completed in accordance with current regulations on investment and construction management;

- In case the capital source is not enough for allocation to works and projects, to prolong their execution schedules beyond 2010 or other capital sources shall be used for their execution;

- To register their capital allocation plans with the Ministry of Planning and Investment and the Ministry of Finance for supervision and allocation;

- For projects on building motorways to centers of communes where exist no motorways, apart from the source of government bond capital, localities should allocate local budgets and mobilize other lawful capital sources, including contributions from the population, for investment therein.

b/ Annually, to incorporate their government bond capital demands into their reports sent to the Ministry of Planning and Investment and the Ministry of Finance for the latter to sum up capital demands of the listed works and projects which shall serve as a basis for the issuance of government bonds and be submitted to the Prime Minister for consideration and decision.

c/ Quarterly, to send reports on the execution of projects funded with government bond capital to the Ministry of Planning and Investment and the Ministry of Finance for sum-up and reporting to the Prime Minister.

d/ Ministries and localities funded with government bond capital shall concentrate on directing and organizing the construction of works in an expeditious and definite manner, ensuring construction quality and strict compliance with the prescribed regimes, putting such works to efficient use as soon as possible, and preventing losses, wastefulness and negative phenomena.

The Ministry of Defense shall perform the uniform management of planning and investment capital for projects on border patrol roads and approve their component projects each province, which shall be executed for no more than 2 years.

Article 6.- The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with the Ministry of Transport and the Ministry of Finance in, scrutinizing and calculating the number of communes without motorways leading to their centers for submission to the Prime Minister for decision on the list of projects and works and their investment capital generated from issuance of government bonds and other sources.

Article 7.- Those provisions of the Prime Minister's Decision No. 182/2003/QD-TTg of September 5, 2003, Decision No. 286/QD-TTg of March 23, 2004, and Decision No. 252/QD-TTg of March 8, 2004, which are contrary to this Decision, are hereby annulled.

Article 8.- This Decision takes effect after its signing.

Ministers, heads of ministerial-level agencies and government-attached agencies, and presidents of provincial/municipal People's Committees shall have to implement this Decision.